Stiglitz – As Wealth Inequality Soars, One City Shows the Way

As Wealth Inequality Soars, One City Shows the Way

By Leah McGrath Goodman – September 24, 2015

Newsweek

Tom Christopulos steers a black Nissan Armada through the sharply angled streets of Ogden, Utah, a historic metropolis about 35 miles north of Salt Lake City lodged at the base of the towering Wasatch Mountains, dissecting the neighborhoods home by home and crunching the numbers out loud. As part of his drive-by, he canvasses the terrain voraciously, even compulsively, visually cataloguing every detail—a rite he’s performed for nearly a decade. “I know every block in this town, every house,” he says. “See those mansions over there on Jefferson Avenue? They were cut up long ago, turned into rentals—flophouses, really. We bought them up, renovated them and turned them back into single-family homes.”

Born and reared in Ogden, Christopulos has labored for the past eight years as the town’s director of community and economic development, squeezing prosperity—slowly and painstakingly—from abandoned rail yards, slaughterhouses and run-down buildings in an effort to rebuild Ogden’s middle class. “It’s been real pick-and-ax work,” he says.

Today, Ogden, with a population of roughly 86,000, boasts a distinction that has put it on the national radar: At a time when the United States—along with much of the rest of the world—is grappling with the pernicious effects of ever-widening wealth inequality, Ogden has become an unlikely beacon of egalitarianism. The city, together with its neighboring communities, has the narrowest wealth gap among America’s largest metropolitan statistical areas, according to the U.S. Census Bureau’s five-year American Community Survey.

But just over a decade ago, the future here looked bleak. Ogden’s main streets were deserted, its shopping districts lay in ruins, and vagrants roamed downtown, peddling drugs. An online message board from 2009 decried Ogden’s urban wasteland and reputation for being “a low-class gang-infested area,” adding despairingly: “Sadly, the Ogden mentality is so deep-rooted” that any efforts to revitalize the town were opposed, and “pursuit of change has offended” many.

Driving this past summer with Christopulos and his economic team, one could not help but be awed by the beauty of this stretch of land at the western edge of the greater Rocky Mountains. Yet just before us were dilapidated rail tracks, a harsh reminder of the city’s glorious commercial past. These days, steel-and-glass aeries rise from the rusting, crumbling infrastructure, punctuating the prosperous present landscape. The story of how Ogden got here is a valuable lesson for a country struggling to bridge the chasm between haves and have-nots.

‘The Defining Issue of Our Time’

Over the past several years, renowned libertarian and former Federal Reserve chief Alan Greenspan, outspoken billionaire Warren Buffett and presidential candidates have come to the same conclusion: Ordinary Americans are no longer getting a fair shake. In the aftermath of the 2008 financial crisis, Greenspan described the emergence of two different Americas—“fundamentally, two separate types of economy”—one in which the wealthy had made a “significant recovery” and the other in which the bulk of America’s labor force remained in a financial rut.

This year, Republican presidential candidate Jeb Bush called the growing divide “the defining issue of our time,” stepping up the rhetoric. “More Americans are stuck at their income levels than ever before,” he said. While the causes of the trend are the subject of endless debates, the statistics don’t lie. Since 1979, real earnings have risen 17 percent, according to the Economic Policy Institute, a nonprofit, nonpartisan Washington think tank. Such slow growth makes it tough for most Americans to pay the bills, let alone accumulate any wealth.

Yet Americans turn on their TVs and watch U.S. Treasury Secretary Jack Lew hailing the nation’s impressive economic growth, which he recently called one of the world’s only “bright spots.” That disconnect can be jarring, says Joseph Stiglitz, professor of economics at Columbia University and winner of the Nobel Prize for economics, because “for many, the middle-class lifestyle is no longer in reach.”

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